SACH-A Sachem Capital Corporation

 

UNITED STATES 

SECURITIES AND EXCHANGE COMMISSION 

Washington, D.C. 20549 

  

 

FORM 8-K

 

CURRENT REPORT 

PURSUANT TO SECTION 13 OR 15(d) OF THE 

SECURITIES EXCHANGE ACT OF 1934

 

Date of Report (Date of earliest event reported): August 20, 2024

 

SACHEM CAPITAL CORP. 

(Exact name of Registrant as specified in its charter)

 

New York		001-37997		81-3467779
(State or other jurisdiction of incorporation)		(Commission File Number)		(IRS Employer Identification No.)

 

568 East Main Street, Branford, Connecticut		06405
(Address of Principal Executive Office)		(Zip Code)

 

Registrant's telephone number, including area code (203) 433-4736

 

(Former Name or Former Address, if Changed Since Last Report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

¨

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class	Ticker symbol(s)	Name of each exchange on which registered
Common Shares, par value $.001 per share	SACH	NYSE American LLC
6.875% Notes due 2024	SACC	NYSE American LLC
7.75% notes due 2025	SCCC	NYSE American LLC
6.00% notes due 2026	SCCD	NYSE American LLC
6.00% notes due 2027	SCCE	NYSE American LLC
7.125% notes due 2027	SCCF	NYSE American LLC
8.00% notes due 2027	SCCG	NYSE American LLC
7.75% Series A Cumulative Redeemable Preferred Stock, Liquidation Preference $25.00 per share	SACHPRA	NYSE American LLC

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter)

Emerging growth company     ¨

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.     ¨

 

 

 

Item 1.01.

Entry into a Material Definitive Agreement.

 

On August 20, 2024, Sachem Capital Corp. (the “Company”) entered into a cooperation agreement (the “Cooperation Agreement”) with Blackwells Capital LLC, Blackwells Onshore I LLC and Jason Aintabi (together with their respective affiliates, “Blackwells”). Pursuant to the Cooperation Agreement, the board of directors of the Company (the “Board”) appointed Jeffery C. Walraven to serve on the Board, with a term expiring at the 2024 annual meeting of shareholders (the “2024 Annual Meeting”), and agreed to nominate, support and recommend Mr. Walraven for election at the 2024 Annual Meeting. Effective upon execution of the Cooperation Agreement, Blackwells withdrew a notice of intent that it submitted to the Company to nominate candidates for election to the Board at the 2024 Annual Meeting.

 

The Cooperation Agreement further provides, among other things, that until the Termination Date (as defined below), (i) Blackwells will be subject to customary standstill restrictions, including, among others, with respect to proxy solicitations and extraordinary transactions; (ii) each party will not disparage or sue the other party, subject to certain exceptions; (iii) Blackwells will vote all common shares of the Company beneficially owned by Blackwells in accordance with the Board’s recommendations with respect to all proposals submitted to shareholders at each annual or special meeting of shareholders of the Company, subject to certain exceptions; and (iv) the Company will reimburse certain of Blackwells’ out-of-pocket costs and expenses, provided that such reimbursement will not exceed $150,000 in the aggregate.

 

The Cooperation Agreement will remain in effect until terminated in accordance with its terms. Unless otherwise mutually agreed to in writing, either party can terminate the Cooperation Agreement with five business days’ notice following the date that is 30 days prior to the earlier of (i) the deadline under the Company’s bylaws for the nomination of director candidates for election to the Board at the 2032 annual meeting of shareholders and (ii) the deadline for shareholder nominations of director candidates under Rule 14a-19 under the Securities Exchange Act of 1934, as amended, with respect to the 2032 annual meeting of shareholders (the “Termination Date”).

 

The foregoing description does not purport to be complete and is qualified in its entirety by reference to the Cooperation Agreement, a copy of which is attached hereto as Exhibit 10.1 and is incorporated herein by reference.

 

Item 5.02.

Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

 

On August 21, 2024, the Board appointed Jeffery C. Walraven to the Board with a term expiring at the 2024 Annual Meeting. Mr. Walraven’s appointment filled the vacant fifth seat on the Board resulting from the resignation of Jeffrey Villano from the Board in 2019.

 

Jeffery C. Walraven, age 55, brings to the Board experience in public company accounting, corporate capital markets and background in the real estate industry. Mr. Walraven is Co-Founder and Chief Operating Officer of Freehold Properties, Inc., a real estate investment trust (REIT) focused on specialty industrial and retail real estate, since its formation in May 2019. In addition, he has served as an independent director and member of the audit committee of Broad Street Realty, Inc. (OTCQX: BRST), a real estate company that owns, operates, develops, and redevelops primarily essential grocery-anchored shopping centers and mixed-use properties, since September 2023. From January 2014 to May 2019, Mr. Walraven served as Executive Vice President and Chief Financial Officer of MedEquities Realty Trust, Inc. (formerly NYSE: MRT), a REIT specializing in healthcare properties. From July 2007 to June 2014, Mr. Walraven served as an assurance partner of BDO USA, LLP, an international accounting firm, and was appointed Managing Partner of BDO USA’s Memphis office in January 2013. Mr. Walraven is formerly a certified public accountant and graduated from Bob Jones University with a B.S. in Financial Management and from Clemson University with a Masters of Professional Accountancy.

 

Except for the arrangements disclosed herein, there is no arrangement or understanding between the Company and Mr. Walraven pursuant to which he was appointed to the Board, and there have been no related party transactions between the Company and Mr. Walraven that would be reportable under Item 404(a) of Regulation S-K. Mr. Walraven will receive compensation consistent with the Company’s compensation program for non-employee directors.

 

The disclosure set forth in Item 1.01 above is hereby incorporated herein by reference.

 

 

Item 7.01.

Regulation FD Disclosure.

 

A copy of a press release announcing the appointment of Mr. Walraven is furnished as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.

 

Item 9.01.

Financial Statements and Exhibits.

(d) Exhibits

 

Exhibit No.	Description
10.1	Cooperation Agreement, dated August 20, 2024, between Sachem Capital Corp. and Blackwells Capital LLC, Blackwells Onshore I LLC and Jason Aintabi
99.1	Press Release, dated August 26, 2024
104	Cover Page Interactive Data File (embedded with the Inline XBRL document).

 

In accordance with General Instruction B.2 of Form 8-K, the information in this Current Report on Form 8-K, furnished pursuant to Item 7.01, including Exhibit 99.1, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

 

* * * * *

 

 

SIGNATURES 

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

	Sachem Capital Corp.
Dated: August 26, 2024	By:	/s/ John L. Villano
		John L. Villano, CPA
		President and Chief Executive Officer

 

 

 

 

 

Exhibit 10.1

 

COOPERATION AGREEMENT

 

This COOPERATION AGREEMENT (this “Agreement”) is made and entered into as of August 20, 2024, by and between Sachem Capital Corp., a New York corporation (the “Company”), and Blackwells Capital LLC, Blackwells Onshore I LLC and Jason Aintabi (together with their respective Affiliates, “Blackwells”). The Company and Blackwells are each herein referred to as a “party” and collectively, the “parties.” Capitalized terms used herein shall have the meanings set forth in Section 14 of this Agreement.

 

WHEREAS, on July 9, 2024, Blackwells Onshore I LLC submitted to the Company notice of Blackwells’ intent to nominate four candidates (the “Nomination Notice”) for election to the Board of Directors of the Company (the “Board”) at the Company’s 2024 Annual Meeting of Shareholders (the “2024 Annual Meeting”); and

 

WHEREAS, the Company and Blackwells have determined to come to an agreement with respect to the withdrawal of the Nomination Notice and certain other matters, as provided in this Agreement.

 

NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties, intending to be legally bound hereby, agree as follows:

 

1.

Board Composition and Related Matters.

 

(a)            Blackwells hereby (i) irrevocably withdraws, with this Agreement constituting sufficient and conclusive evidence of such withdrawal, the Nomination Notice as well as Blackwells’ director nominations and any related materials or notices submitted to the Company in connection therewith or related thereto with respect to the 2024 Annual Meeting (collectively, the “Blackwells Shareholder Matters”), and (ii) agrees to abstain from taking further action to pursue the Blackwells Shareholder Matters or any other action related to the 2024 Annual Meeting (other than in accordance with this Agreement.)

 

(b)            Simultaneously with the execution of this Agreement, the Company shall take all necessary actions to appoint Jeffery Charles Walraven to the Board as a director, with a term expiring at the 2024 Annual Meeting or until his earlier death, disability, resignation, disqualification, or removal. The Company shall take all necessary actions to (i) nominate Mr. Walraven for election to the Board at the 2024 Annual Meeting, (ii) include Mr. Walraven in the Company’s proxy statement and proxy card for the 2024 Annual Meeting, (iii) solicit proxies for the election of Mr. Walraven in respect of the 2024 Annual Meeting in a manner no less rigorous and favorable than the manner in which it solicits proxies for the election of the Company’s other director nominees, and (iv) support and recommend for the election of Mr. Walraven in respect of the 2024 Annual Meeting in the same manner as it supports and recommends for the election of the Company’s other director nominees.

 

 

2.            Voting Commitment. Until the Termination Date, Blackwells shall, and shall cause its Representatives to appear in person or by proxy at each Shareholder Meeting (including the 2024 Annual Meeting) and to vote, or deliver consents or consent revocations with respect to, all of the Company’s common shares, par value $0.001 per share (the “Common Shares”), beneficially owned by Blackwells and over which Blackwells has voting power, in accordance with the Board’s recommendations with respect to all proposals submitted to shareholders at each such Shareholder Meeting, in each case as the Board’s recommendation is set forth in the applicable definitive proxy statement, consent solicitation statement or revocation solicitation statement filed by the Company in respect of such Shareholder Meeting. Notwithstanding the foregoing, (i) in the event that Institutional Shareholder Services, Inc. (“ISS”) issues voting recommendations that differ from the voting recommendation of the Board with respect to any proposal submitted to the shareholders at any Shareholder Meeting (other than proposals to elect or remove directors), Blackwells shall be permitted to vote, or deliver consents or consent revocations with respect to, all or a portion of the Common Shares it beneficially owns and over which Blackwells has voting power, respectively, at such Shareholder Meeting in accordance with ISS recommendations; and (ii) Blackwells shall be permitted to vote in its sole discretion on any proposal of the Company in respect of any Extraordinary Transaction that is subject to a vote of the Company’s shareholders. Blackwells shall use commercially reasonable efforts (including by calling back any loaned out shares) to ensure that Blackwells has voting power for each share beneficially owned by it on the record date for and through each Shareholder Meeting. For the avoidance of doubt, if ISS is silent regarding any Company proposal, Blackwells shall vote only in accordance with the Board’s recommendation.

 

3.            Standstill. Prior to the Termination Date, except as otherwise provided in this Agreement, without the prior written consent of the Board, Blackwells shall not, and shall cause each of its Affiliates and Associates not to, in each case, directly or indirectly, in whole or in part, in any manner:

 

(a)            acquire, offer or seek to acquire, agree to acquire or acquire rights to acquire (except by way of stock dividends or other distributions or offerings made available to holders of voting securities of the Company generally on a pro rata basis or pursuant to an Extraordinary Transaction approved by the Board), directly or indirectly, whether by purchase, tender or exchange offer, through the acquisition of control of another person, by joining a group, through swap or hedging transactions or otherwise, any voting securities of the Company (other than through a broad-based market basket or index fund) or any voting rights decoupled from the underlying voting securities which would result in Blackwells’ beneficially owning or constructively owning (as defined in Sections 856(h) and 544(a) of the Internal Revenue Code of 1986, as amended), in the aggregate, more than four and ninety-nine hundredths percent (4.99%) of the then-outstanding Common Shares;

 

(b)            sell, assign, or otherwise transfer or dispose of Common Shares, or any rights decoupled from such shares, beneficially owned by them, other than in open market sale transactions where the identity of the purchaser is not known or in underwritten widely-dispersed public offerings, to any Third Party that, to Blackwells’ knowledge (after reasonable due inquiry in connection with a private, non-open market transaction), would result in such Third Party’s, together with its Affiliates and Associates, beneficially owning or constructively owning (as defined in Sections 856(h) and 544(a) of the Internal Revenue Code of 1986, as amended), in the aggregate, more than four and ninety-nine hundredths percent (4.99%);

 

 

(c)            (i) nominate, recommend for nomination or give notice of an intent to nominate or recommend for nomination a person for election at any Shareholder Meeting at which the Company’s directors are to be elected; (ii) initiate, encourage or participate in any solicitation of proxies, consents or consent revocations in respect of any election contest or removal contest with respect to the Company’s directors; (iii) submit, initiate, make or be a proponent of any shareholder proposal for consideration at, or bring any other business before, any Shareholder Meeting; (iv) initiate, encourage or participate in any solicitation of proxies, consents or consent revocations in respect of any shareholder proposal for consideration at, or other business brought before, any Shareholder Meeting; (v) call or seek to call, or request to call, alone or in concert with others, any Shareholder Meeting, whether or not such a meeting is permitted by the Company’s Certificate of Incorporation (as amended from time to time, the “Certificate of Incorporation”) or the Company’s Amended and Restated Bylaws (as amended from time to time, the “Bylaws”), including any “town hall meeting,” or initiate, encourage or participate in any shareholder action by written consent; or (vi) initiate, encourage or participate in any “withhold” or similar campaign with respect to any proposal for consideration at, or other business brought before, any Shareholder Meeting;

 

(d)            form, join or in any way participate in or with any group or agreement of any kind with respect to any voting securities of the Company, including in connection with any election or removal contest with respect to the Company’s directors or any shareholder proposal or other business brought before any Shareholder Meeting;

 

(e)            deposit any voting securities of the Company in any voting trust or subject any Company voting securities to any arrangement or agreement with respect to the voting thereof;

 

(f)            seek, alone or in concert with others, to amend any provision of the Certificate of Incorporation, the Bylaws, Board committee charters, corporate governance principles, and any similar governance-related policies or documents of the Company;

 

(g)            demand an inspection of the Company’s books and records;

 

(h)            make any proposal with respect to, or make any statement or otherwise seek to encourage, advise or assist any person in so encouraging or advising: (i) any change in the composition, number or term of directors serving on the Board or the filling of any vacancies on the Board, (ii) any change in the capitalization or dividend policy or share repurchase programs or practices of the Company, (iii) any other change in the Company’s management, governance, corporate structure, business, operations, strategy, affairs or policies, (iv) causing a class of securities of the Company to be delisted from, or to cease to be authorized to be quoted on, any securities exchange, or (v) causing a class of equity securities of the Company to become eligible for termination of registration pursuant to Section 12(g)(4) of the Exchange Act;

 

(i)            publicly disclose any vote, delivery of consents or consent revocations, or failure to deliver consents or consent revocations, as applicable, by Blackwells against the voting recommendations of the Board in connection with a Shareholder Meeting;

 

(j)            initiate, make, offer, propose to effect or in any way participate, directly or indirectly, in any Extraordinary Transaction or make, directly or indirectly, any proposal, either alone or in concert with others, to the Company or the Board that would reasonably be expected to require a public announcement or disclosure regarding any such matter;

 

 

(k)            effect or seek to effect, offer or propose to effect, cause or participate in, or in any way assist or facilitate any other person to effect or seek to effect, offer or propose to effect, cause or participate in, any Extraordinary Transaction;

 

(l)            enter into any negotiations, agreements or understandings with any Third Party with respect to any of the foregoing, or advise, assist, encourage or seek to persuade any Third Party to take any action that is prohibited under this Section 3, or otherwise take or cause any action inconsistent with any of the foregoing; 

 

(m)            make or in any way advance any request or proposal that the Company or the Board amend, modify or waive any provision of this Agreement; or

 

(n)            take any action challenging the validity or enforceability of this Section 3 or this Agreement unless the Company is challenging the validity or enforceability of this Agreement;

 

provided, however, that (i) the restrictions in this Section 3 shall not prohibit or restrict Blackwells or its Representatives from making (A) any factual statement to the extent required by applicable legal process, subpoena or legal requirement from any governmental authority with competent jurisdiction over the party from whom information is sought (so long as such request did not arise as a result of action by Blackwells or its Representatives) or (B) any private or confidential communication to or with the Board or any officer or director of the Company or legal counsel that is not intended to, and would not reasonably be expected to, trigger or require any public disclosure of such communications for any of the parties and (ii) the restrictions in this Section 3 shall not restrict Blackwells or its Representatives from tendering shares, receiving payment for shares or otherwise participating in any transaction approved by the Board on the same basis as the other shareholders of the Company, subject to the other terms of this Agreement. Blackwells shall comply with the requirements of Section 13(d) of the Exchange Act.

 

4.            Mutual Non-Disparagement. Prior to the Termination Date, each party hereby covenants and agrees that it and its respective Representatives shall not, without the prior written consent of the other party, make any public statement, including by filing or furnishing any document to the SEC, or speaking to any analyst, investor, or member of the press or other person, in a manner that criticizes, undermines, disparages or otherwise reflects detrimentally on the other party, the other party’s Affiliates or subsidiaries, the other party’s or its Affiliates’ or subsidiaries’ current or former directors in their capacity as such, the other party’s or its Affiliates’ or subsidiaries’ officers or employees (including with respect to such persons’ service at the other party, and including any current officer of a party or a party’s Affiliates or subsidiaries who no longer serves in such capacity following the execution of this Agreement), or any of their businesses, products or services. A statement in breach of this Section 4 shall only be deemed to be made by the Company if made by a member of the Board or senior management team, in each case authorized to make such statement. The restrictions in this Section 4 shall not (x) apply (i) to any compelled testimony or production of information, whether by legal process, subpoena or as part of a response to a request for information from any governmental or regulatory authority with jurisdiction over the party from whom information is sought, in each case, to the extent required, or (ii) to any disclosure that such party reasonably believes, after consultation with outside counsel, to be legally required by applicable law, rules or regulations, in each case of clause (i) or (ii), solely to the extent that such restrictions would require a violation of the applicable requirement; or (y) prohibit any party from reporting what it reasonably believes, after consultation with outside counsel, to be violations of federal law or regulation to any governmental authority pursuant to Section 21F of the Exchange Act or Rule 21F promulgated thereunder.

 

 

5.            No Litigation. Prior to the Termination Date, each party hereby covenants and agrees that it shall not, and shall not permit any of its Representatives to, directly or indirectly, alone or in concert with others, encourage, threaten, initiate or pursue, or assist any other person to encourage, threaten, initiate or pursue, any lawsuit, claim or proceeding before any court (each, a “Legal Proceeding”) against the other party or any of its Representatives based on information known or that should have been known by such party as of the date of this Agreement, except for (a) any Legal Proceeding initiated primarily to remedy a breach of or to enforce this Agreement and (b) counterclaims with respect to any proceeding initiated by, or on behalf of, one (1) party or its Affiliates against the other party or any Affiliate of such other party; provided, however, that the foregoing shall not prevent any party or any of its Representatives from responding to oral questions, interrogatories, requests for information or documents, subpoenas, civil investigative demands or similar processes (each, a “Legal Requirement”) in connection with any Legal Proceeding if such Legal Proceeding has not been initiated by, on behalf of or at the direct or indirect suggestion of such party or any of its Representatives; provided, further, that in the event any party or any of its Representatives is subject to such Legal Requirement, such party shall give prompt written notice of such Legal Requirement to the other party (except where such notice would be prohibited by law, other than by a contractual relationship). Each party represents and warrants that neither it nor any assignee has filed any lawsuit against the other party.

 

6.

Public Statements; SEC Filings.

 

No later than four (4) Business Days following the date of this Agreement, the Company shall file with the SEC a Current Report on Form 8-K, setting forth a brief description of the terms of this Agreement and appending this Agreement as an exhibit thereto (the “Form 8-K”). The Company shall provide Blackwells with a reasonable opportunity to review and comment on such Form 8-K prior to the filing with the SEC and consider in good faith any comments of Blackwells.

 

7.            Affiliates and Associates. Each party shall instruct its Affiliates and Associates to comply with the terms of this Agreement and shall be responsible for any breach of this Agreement by any such Affiliate or Associate. A breach of this Agreement by an Affiliate or Associate of a party, if such Affiliate or Associate is not a party to this Agreement, shall be deemed to occur if such Affiliate or Associate engages in conduct that would constitute a breach of this Agreement if such Affiliate or Associate was a party to the same extent as a party to this Agreement.

 

8.

Representations and Warranties.

 

(a)            Blackwells represents and warrants that it has full power and authority to execute, deliver and carry out the terms and provisions of this Agreement and to consummate the transactions contemplated hereby, and that this Agreement has been duly and validly executed and delivered by it, constitutes a valid and binding obligation and agreement of it and is enforceable against it in accordance with its terms. Blackwells represents that the execution of this Agreement, the consummation of any of the transactions contemplated hereby, and the fulfillment of the terms hereof, in each case in accordance with the terms hereof, will not conflict with, or result in a breach or violation of the organizational documents of it as currently in effect, the execution, delivery and performance of this Agreement by it does not and will not (i) violate or conflict with any law, rule, regulation, order, judgment or decree applicable to it or (ii) result in any breach or violation of or constitute a default (or an event which with notice or lapse of time or both could constitute such a breach, violation or default) under or pursuant to, or result in the loss of a material benefit under, or give any right of termination, amendment, acceleration or cancellation of, any organizational document, agreement, contract, commitment, understanding or arrangement to which it is a party or by which it is bound.

 

 

(b)            Blackwells represents and warrants that it has voting authority over its Common Shares, and owns no Synthetic Equity Interests or any Short Interests in the Company.

 

(c)            The Company hereby represents and warrants that it has the power and authority to execute, deliver and carry out the terms and provisions of this Agreement and to consummate the transactions contemplated hereby, and that this Agreement has been duly and validly authorized, executed and delivered by the Company, constitutes a valid and binding obligation and agreement of the Company and is enforceable against the Company in accordance with its terms, except as enforcement thereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or similar laws generally affecting the rights of creditors and subject to general equity principles. The Company represents that the execution of this Agreement, the consummation of any of the transactions contemplated hereby, and the fulfillment of the terms hereof, in each case in accordance with the terms hereof, will not conflict with, or result in a breach or violation of the organizational documents of the Company as currently in effect, and the execution, delivery and performance of this Agreement by the Company does not and will not violate or conflict with (i) any law, rule, regulation, order, judgment or decree applicable to the Company or (ii) result in any breach or violation of or constitute a default (or an event which with notice or lapse of time or both could constitute such a breach, violation or default) under or pursuant to, or result in the loss of a material benefit under, or give any right of termination, amendment, acceleration or cancellation of, any organizational document, agreement, contract, commitment, understanding or arrangement to which the Company is a party or by which it is bound.

 

9.

Termination.

 

(a)            Unless otherwise mutually agreed to in writing by each party, this Agreement shall remain in effect until terminated in accordance with its terms. Either party can terminate this Agreement with five (5) Business Days’ notice following the date that is thirty (30) days prior to the earlier of (x) the nomination deadline under the Bylaws for the nomination of director candidates for election to the Board at the 2032 annual meeting of shareholders, if any, and (y) the deadline for shareholder nominations of director candidates under Rule 14a-19(a) and Rule 14a-19(b) under the Exchange Act, in each case for clauses (x) and (y), with respect to the 2032 annual meeting of shareholders (the effective date of termination, the “Termination Date”). Notwithstanding anything to the contrary in this Agreement:

 

 

(i)            the obligations of Blackwells to the Company pursuant to Sections 1 (Board Composition and Related Matters), 2 (Voting Commitment), 3 (Standstill), 4 (Mutual Non-Disparagement), 5 (No Litigation) and 6 (Public Statements; SEC Filings) shall terminate in the event that the Company materially breaches its obligations pursuant to Sections 1 (Board Composition and Related Matters), 4 (Mutual Non-Disparagement) or 5 (No Litigation), or the representations and warranties in Section 8(c) (Representations and Warranties) and such breach (if capable of being cured) has not been cured within fifteen (15) calendar days following written notice of such breach from Blackwells, or, if impossible to cure within fifteen (15) calendar days, the Company has not taken substantive action to correct within fifteen (15) calendar days following written notice of such breach from Blackwells; provided, however, that the obligations of Blackwells pursuant to Section 5 (No Litigation) shall terminate immediately in the event that the Company materially breaches its obligations under Section 5 (No Litigation);

 

(ii)            the obligations of the Company to Blackwells pursuant to Sections 1 (Board Composition and Related Matters), 4 (Mutual Non-Disparagement) or 5 (No Litigation) shall terminate in the event that Blackwells materially breaches its obligations in Sections 1 (Board Composition and Related Matters), 2 (Voting Commitment), 3 (Standstill), 4 (Mutual Non-Disparagement), 5 (No Litigation) or 6 (Public Statements; SEC Filings), or the representations and warranties in Section 8(a)–(b) (Representations and Warranties) and such breach (if capable of being cured) has not been cured within fifteen (15) calendar days following written notice of such breach from the Company, or, if impossible to cure within fifteen (15) calendar days, Blackwells has not taken substantive action to correct within fifteen (15) calendar days following written notice of such breach from the Company; provided, however, that the obligations of the Company to Blackwells pursuant to Section 5 (No Litigation) shall terminate immediately in the event that Blackwells materially breaches its obligations under Section 5 (No Litigation).

 

(b)            If this Agreement is terminated in accordance with this Section 9, this Agreement shall forthwith become null and void, but no termination shall relieve any party from liability for any breach of this Agreement prior to such termination. Notwithstanding the foregoing, Sections 11 (Notices), 12 (Governing Law; Jurisdiction; Jury Waiver), 13 (Specific Performance) and 15 (Miscellaneous) shall survive the termination of this Agreement.

 

10.            Expenses. The Company shall reimburse Blackwells for documented out-of-pocket costs, fees and expenses (including attorneys’ fees and other legal expenses) incurred by Blackwells in connection with its engagement with the Company and the negotiation and execution of this Agreement; provided, however, that such reimbursement shall not exceed $150,000 in the aggregate.

 

11.            Notices. All notices, demands and other communications to be given or delivered under or by reason of the provisions of this Agreement shall be in writing and shall be deemed to have been given (a) when delivered by hand, with written confirmation of receipt; (b) upon sending if sent by electronic mail to the electronic mail addresses below, with confirmation of receipt from the receiving party by electronic mail; (c) one (1) Business Day after being sent by a nationally recognized overnight carrier to the addresses set forth below; or (d) when actually delivered if sent by any other method that results in delivery, with written confirmation of receipt:

 

 

If to the Company:   Sachem Capital Corp. 568 East Main Street Branford, Connecticut 06405 Attn: John L. Villano, Chairman of the Board, President and Chief Executive Officer Email: [***]	with mandatory copies (which shall not constitute notice) to:   Sidley Austin LLP 787 Seventh Avenue New York, New York 10019 Attn: Kai H.E. Liekefett Leonard Wood Email: kliekefett@sidley.com lwood@sidley.com
If to Blackwells or Jason Aintabi:   Blackwells Onshore I LLC 400 Park Avenue, 4th Floor New York, New York 10022 Attention: Jason Aintabi Email: [***]	with mandatory copies (which shall not constitute notice) to:   Vinson & Elkins L.L.P. 1114 Sixth Avenue, 32nd Floor New York, New York 10036 Attn: Lawrence Elbaum Patrick Gadson Email: lelbaum@velaw.com pgadson@velaw.com

 

12.            Governing Law; Jurisdiction; Jury Waiver. This Agreement, and any disputes arising out of or related to this Agreement (whether for breach of contract, tortious conduct or otherwise) or the validity thereof, shall be governed by, and construed in accordance with, the laws of the State of New York, without giving effect to its conflict of laws principles. The parties agree that exclusive jurisdiction and venue for any Legal Proceeding arising out of or related to this Agreement shall exclusively lie in the state courts of the State of New York or, if such courts do not have subject matter jurisdiction, the Federal courts of the United States sitting in the State of New York, Borough of Manhattan, and any appellate court from any such state or Federal court. Each party waives any objection it may now or hereafter have to the laying of venue of any such Legal Proceeding, and irrevocably submits to personal jurisdiction in any such court in any such Legal Proceeding and hereby further irrevocably and unconditionally waives and agrees not to plead or claim in any court that any such Legal Proceeding brought in any such court has been brought in any inconvenient forum. Each party consents to accept service of process in any such Legal Proceeding by service of a copy thereof upon either its registered agent in the State of New York or the Secretary of State of the State of New York, with a copy delivered to it by certified or registered mail, postage prepaid, return receipt requested, addressed to it at the address set forth in Section 11. Nothing contained herein shall be deemed to affect the right of any party to serve process in any manner permitted by law. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT.

 

 

13.            Specific Performance. Each party to this Agreement acknowledges and agrees that a non-breaching party would be irreparably injured by an actual breach of this Agreement by another party or its Representatives and that monetary remedies would be inadequate to protect the parties against any actual or threatened breach or continuation of any breach of this Agreement. Without prejudice to any other rights and remedies otherwise available to the parties under this Agreement, each party shall be entitled to equitable relief by way of injunction or otherwise and specific performance of the provisions hereof upon satisfying the requirements to obtain such relief without the necessity of posting a bond or other security, if a party or any of its Representatives breaches or threatens to breach any provision of this Agreement. Such remedy shall not be deemed to be the exclusive remedy for a breach of this Agreement but shall be in addition to all other remedies available at law or equity to the non-breaching party.

 

14.            Certain Definitions and Interpretations. As used in this Agreement: (a) the terms “Affiliate” and “Associate” (and any plurals thereof) have the meanings ascribed to such terms under Rule 12b-2 promulgated by the SEC under the Exchange Act and shall include all persons or entities that after the date hereof become Affiliates or Associates of any applicable person or entity referred to in this Agreement; provided, however, that the term “Associate” shall refer only to Associates controlled by the Company or Blackwells, as applicable; provided, further, that, for purposes of this Agreement, Blackwells shall not be an Affiliate or Associate of the Company and the Company shall not be an Affiliate or Associate of Blackwells; (b) the terms “beneficial ownership,” “group,” “person,” “proxy” and “solicitation” (and any plurals thereof) have the meanings ascribed to such terms under the Exchange Act and the rules and regulations promulgated thereunder, provided, that the meaning of “solicitation” shall be without regard to the exclusions set forth in Rules 14a-1(l)(2)(iv) and 14a-2 under the Exchange Act; (c) the term “Business Day” means any day that is not a Saturday, Sunday or other day on which commercial banks in the State of New York are authorized or obligated to be closed by applicable law; (d) the term “Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder; (e) the term “Extraordinary Transaction” means any tender offer, exchange offer, share exchange, merger, consolidation, acquisition, business combination, sale, recapitalization, restructuring, or other corporate transaction with a third party that, in each case, results in a change in control of the Company or the sale of all or substantially all of its assets; (f) the term “Representatives” means (i) a person’s Affiliates and Associates, and (ii) its and their respective directors, officers, employees, partners, members, managers, consultants, agents and other representatives (excluding legal, financial and other advisors engaged for advice in connection with the election contest at the 2024 Annual Meeting) acting in a capacity on behalf of, in concert with or at the direction of such person or its Affiliates or Associates; (g) the term “SEC” means the U.S. Securities and Exchange Commission; (h) the term “Short Interests” means any agreement, arrangement, understanding or relationship, including any repurchase or similar so-called “stock borrowing” agreement or arrangement, engaged in, directly or indirectly, by such person, the purpose or effect of which is to mitigate loss to, reduce the economic risk (of ownership or otherwise) of shares of any class or series of the Company’s equity securities by, manage the risk of share price changes for, or increase or decrease the voting power of, such person with respect to the shares of any class or series of the Company’s equity securities, or that provides, directly or indirectly, the opportunity to profit from any decrease in the price or value of the shares of any class or series of the Company’s equity securities; (i) the term “Shareholder Meeting” means each annual or special meeting of shareholders of the Company, or any action by written consent of the Company’s shareholders in lieu thereof, and any adjournment, postponement, rescheduling or continuation thereof; (j) the term “Synthetic Equity Interests” means any derivative, swap or other transaction or series of transactions engaged in, directly or indirectly, by such person, the purpose or effect of which is to give such person economic risk similar to ownership of equity securities of any class or series of the Company, including due to the fact that the value of such derivative, swap or other transactions are determined by reference to the price, value or volatility of any shares of any class or series of the Company’s equity securities, or which derivative, swap or other transactions provide the opportunity to profit from any increase in the price or value of shares of any class or series of the Company’s equity securities, without regard to whether (i) the derivative, swap or other transactions convey any voting rights in such equity securities to such person; (ii) the derivative, swap or other transactions are required to be, or are capable of being, settled through delivery of such equity securities; or (iii) such person may have entered into other transactions that hedge or mitigate the economic effect of such derivative, swap or other transactions; and (k) the term “Third Party” refers to any person that is not a party, a member of the Board, a director or officer of the Company, or legal counsel to any party. In this Agreement, unless a clear contrary intention appears, (i) the word “including” (in its various forms) means “including, without limitation;” (ii) the words “hereunder,” “hereof,” “hereto” and words of similar import are references to this Agreement as a whole and not to any particular provision of this Agreement; (iii) the word “or” is not exclusive; (iv) references to “Sections” in this Agreement are references to Sections of this Agreement unless otherwise indicated; and (v) whenever the context requires, the masculine gender shall include the feminine and neuter genders.

 

 

15.

Miscellaneous.

 

(a)            This Agreement contains the entire agreement between the parties and supersedes all other prior agreements and understandings, both written and oral, between the parties with respect to the subject matter hereof.

 

(b)            This Agreement is solely for the benefit of the parties and is not enforceable by any other persons.

 

(c)            This Agreement shall not be assignable by operation of law or otherwise by a party without the consent of the other party. Any purported assignment without such consent is void ab initio. Subject to the foregoing sentence, this Agreement shall be binding upon, inure to the benefit of, and be enforceable by and against the permitted successors and assigns of each party.

 

(d)            Neither the failure nor any delay by a party in exercising any right, power or privilege under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any right, power or privilege hereunder.

 

(e)            If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated. It is hereby stipulated and declared to be the intention of the parties that the parties would have executed the remaining terms, provisions, covenants and restrictions without including any of such which may be hereafter declared invalid, void or unenforceable. In addition, the parties agree to use their reasonable best efforts to agree upon and substitute a valid and enforceable term, provision, covenant or restriction for any of such that is held invalid, void or unenforceable by a court of competent jurisdiction.

 

 

(f)            Any amendment or modification of the terms and conditions set forth herein or any waiver of such terms and conditions must be agreed to in a writing signed by each party.

 

(g)            This Agreement may be executed in one (1) or more textually identical counterparts, each of which shall be deemed an original, but all of which together shall constitute one (1) and the same agreement. Signatures to this Agreement transmitted by facsimile transmission, by electronic mail in “portable document format” (“.pdf”) form, or by any other electronic means intended to preserve the original graphic and pictorial appearance of a document, shall have the same effect as physical delivery of the paper document bearing the original signature.

 

(h)            Each of the parties acknowledges that it has been represented by counsel of its choice throughout all negotiations that have preceded the execution of this Agreement, and that it has executed this Agreement with the advice of such counsel.

 

(i)            The headings set forth in this Agreement are for convenience of reference purposes only and shall not affect or be deemed to affect in any way the meaning or interpretation of this Agreement or any term or provision of this Agreement.

 

[Signature Pages Follow]

 

 

IN WITNESS WHEREOF, each of the parties has executed this Agreement, or caused the same to be executed by its duly authorized representative, as of the date first above written.

 

 

	THE COMPANY:
	SACHEM CAPITAL CORP.
	By:	/s/ John L. Villano
	John L. Villano
	Chairman of the Board, President and Chief Executive Officer

  

Signature Page to Cooperation Agreement

 

  

	BLACKWELLS:
	Blackwells Capital LLC
	By:	/s/ Jason Aintabi
	Jason Aintabi
	President & Secretary

 

 

	Blackwells Onshore I LLC
	By:	/s/ Jason Aintabi
	Jason Aintabi
	President & Secretary
	/s/ Jason Aintabi
	Jason Aintabi

  

Signature Page to Cooperation Agreement

 

 

 

Exhibit 99.1

 

Sachem Capital Corp. Announces Appointment of Jeffery C. Walraven to the Board of Directors

 

BRANFORD, Conn. – August 26, 2024 – Sachem Capital Corp. (the “Company” or “Sachem Capital”), announced today that its Board of Directors (the “Board”) has appointed Jeffery C. Walraven to the Board, effective August 21, 2024. Mr. Walraven will also stand for election at the Company’s 2024 Annual Meeting of Shareholders.

 

“We are pleased to welcome Jeffery Walraven to our Board,” said John L. Villano, CEO and Chairman of the Board of Sachem Capital. “Jeff’s deep experience in the real estate industry, especially in public company leadership, accounting and capital markets, will be invaluable to Sachem Capital as we grow our business and pursue value creation for our shareholders.”

 

Mr. Walraven is Co-Founder and Chief Operating Officer of Freehold Properties, Inc., a real estate investment trust (REIT), since its formation in 2019. He has also served as an independent director and member of the audit committee of Broad Street Realty, Inc. (OTCQX: BRST), a real estate company that owns, operates, develops, and redevelops primarily essential grocery-anchored shopping centers and mixed-use properties, since 2023. From 2014 to 2019, Mr. Walraven served as Executive Vice President and Chief Financial Officer of MedEquities Realty Trust, Inc. (formerly NYSE: MRT) and previously served in various leadership roles at BDO USA, LLP, an international accounting firm, from 2007 to 2014.

 

“Jeff’s appointment is a meaningful step in Sachem Capital’s efforts to refresh the Board,” added Brian Prinz, independent director and Chair of the Nominating and Corporate Governance Committee. “Jeff’s public company accounting and corporate finance expertise as well as his leadership experience align with the qualities we have been searching for in a new independent Board member.”

 

For further information, please refer to the Company’s Current Report on Form 8-K filed with the SEC on August 26, 2024.

 

About Sachem Capital Corp.

 

Sachem Capital Corp. is a mortgage REIT that specializes in originating, underwriting, funding, servicing, and managing a portfolio of loans secured by first mortgages on real property. It offers short-term (i.e. three years or less) secured, nonbanking loans to real estate investors to fund their acquisition, renovation, development, rehabilitation, or improvement of properties. The Company’s primary underwriting criteria is a conservative loan to value ratio. The properties securing the loans are generally classified as residential or commercial real estate and, typically, are held for resale or investment. Each loan is secured by a first mortgage lien on real estate and is personally guaranteed by the principal(s) of the borrower. The Company also makes opportunistic real estate purchases apart from its lending activities.

  

Forward Looking Statements

This press release may contain forward-looking statements. All statements other than statements of historical facts contained in this press release, including statements regarding our future results of operations and financial position, strategy and plans, and our expectations for future operations, are forward-looking statements. Such forward-looking statements are subject to several risks, uncertainties and assumptions as described in the Annual Report on Form 10-K for 2023 filed with the U.S. Securities and Exchange Commission (the “SEC”) on April 1, 2024. Because of these risks, uncertainties and assumptions, any forward-looking events and circumstances discussed in this press release may not occur. You should not rely upon forward-looking statements as predictions of future events. Neither the Company nor any other person assumes responsibility for the accuracy and completeness of any of these forward-looking statements. The Company disclaims any duty to update any of these forward-looking statements. All forward-looking statements attributable to the Company are expressly qualified in their entirety by these cautionary statements as well as others made in this press release. You should evaluate all forward-looking statements made by the Company in the context of these risks and uncertainties.

 

 

Important Additional Information and Where to Find It

The Company intends to file a proxy statement on Schedule 14A, an accompanying proxy card, and other relevant documents with the SEC in connection with its solicitation of proxies from the Company’s shareholders for the Company’s 2024 Annual Meeting of Shareholders. THE COMPANY’S SHAREHOLDERS ARE STRONGLY ENCOURAGED TO READ THE COMPANY’S DEFINITIVE PROXY STATEMENT (INCLUDING ANY AMENDMENTS OR SUPPLEMENTS THERETO), THE ACCOMPANYING PROXY CARD, AND ALL OTHER DOCUMENTS FILED WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. Investors and shareholders may obtain a copy of the definitive proxy statement, an accompanying proxy card, any amendments or supplements to the definitive proxy statement and other documents filed by the Company with the SEC at no charge at the SEC’s website at www.sec.gov. Copies will also be available at no charge by clicking the “SEC Filings” link in the “Investor” section of the Company’s website, http://sachemcapitalcorp.com, or by contacting investors@sachemcapitalcorp.com as soon as reasonably practicable after such materials are electronically filed with, or furnished to, the SEC.

 

Participants in the Solicitation

The Company, its directors, certain of its officers, and other employees may be deemed to be “participants” (as defined in Section 14(a) of the Securities Exchange Act of 1934, as amended) in the solicitation of proxies from the Company’s shareholders in connection with matters to be considered at the Company’s 2024 Annual Meeting of Shareholders.

 

Information about the names of the Company’s directors and officers, their respective interests in the Company by security holdings or otherwise, and their respective compensation is set forth in the sections entitled “Election of Directors,” “Compensation of Directors,” “Executive Compensation,” and “Security Ownership of Certain Beneficial Owners” of the Company’s Proxy Statement on Schedule 14A in connection with the 2023 Annual Meeting of Shareholders, filed with the SEC on August 4, 2023 (available here) and the Company’s Annual Report on Form 10-K, filed with the SEC on April 1, 2024 (available here). To the extent the security holdings of directors and executive officers have changed since the amounts described in these filings, such changes are set forth on Initial Statements of Beneficial Ownership on Form 3 or Statements of Change in Ownership on Form 4 filed with the SEC, which can be found at no charge at the SEC’s website at www.sec.gov. Updated information regarding the identity of potential participants and their direct or indirect interests, by security holdings or otherwise, in the Company will be set forth in the Company’s Proxy Statement on Schedule 14A for the 2024 Annual Meeting of Shareholders and other relevant documents to be filed with the SEC, if and when they become available. These documents will be available free of charge as described above.

 

Investor & Media Contact:

 

Email: investors@sachemcapitalcorp.com

 

 

 

v3.24.2.u1

Cover	Aug. 20, 2024
Document Information [Line Items]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Aug. 20, 2024
Entity File Number	001-37997
Entity Registrant Name	SACHEM CAPITAL CORP.
Entity Central Index Key	0001682220
Entity Tax Identification Number	81-3467779
Entity Incorporation, State or Country Code	NY
Entity Address, Address Line One	568 East Main Street
Entity Address, City or Town	Branford
Entity Address, State or Province	CT
Entity Address, Postal Zip Code	06405
City Area Code	203
Local Phone Number	433-4736
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Entity Emerging Growth Company	false
Common Stock [Member]
Document Information [Line Items]
Title of 12(b) Security	Common Shares, par value $.001 per share
Trading Symbol	SACH
Security Exchange Name	NYSEAMER
Notes 6. 875 Percent Due 2024 [Member]
Document Information [Line Items]
Title of 12(b) Security	6.875% Notes due 2024
Trading Symbol	SACC
Security Exchange Name	NYSEAMER
Notes 7. 75percent Due 2025 [Member]
Document Information [Line Items]
Title of 12(b) Security	7.75% notes due 2025
Trading Symbol	SCCC
Security Exchange Name	NYSEAMER
Notes 6. 00percent Due 2026 [Member]
Document Information [Line Items]
Title of 12(b) Security	6.00% notes due 2026
Trading Symbol	SCCD
Security Exchange Name	NYSEAMER
Notes 6. 00percent Due 2027 [Member]
Document Information [Line Items]
Title of 12(b) Security	6.00% notes due 2027
Trading Symbol	SCCE
Security Exchange Name	NYSEAMER
Notes 7. 125 Percent Due 2027 [Member]
Document Information [Line Items]
Title of 12(b) Security	7.125% notes due 2027
Trading Symbol	SCCF
Security Exchange Name	NYSEAMER
Notes 8. 00percent Due 2027 [Member]
Document Information [Line Items]
Title of 12(b) Security	8.00% notes due 2027
Trading Symbol	SCCG
Security Exchange Name	NYSEAMER
Series A Preferred Stock [Member]
Document Information [Line Items]
Title of 12(b) Security	7.75% Series A Cumulative Redeemable Preferred Stock, Liquidation Preference $25.00 per share
Trading Symbol	SACHPRA
Security Exchange Name	NYSEAMER

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